Shire has attracted further takeover interest as it continues to hold talks with a Japanese rival - helping its shares surge on Thursday.

The FTSE 100 firm, which specialises in treatments for rare diseases and neuroscience products, said it had rejected a third approach from Takeda, the latest worth £44bn in cash and new shares.

The Dublin-based biotech specialist said the proposal "significantly undervalued the company, its growth prospects and pipeline".

It later emerged that another competitor in the pharma field, best-known for being the maker of Botox, was ironing out its own position on trying to acquire Shire.

Allergan, also based in the Irish capital, said its interest was in the "early stages".

Its statement read: "No offer has been made. There can be no certainty an offer will be made nor as to the terms on which any such offer would be made.

"A further announcement will be made as appropriate."

Shire shares then closed the day almost 6% higher amid the prospect of a possible bidding war only for Allergan to pull the plug, confirming it was no longer interested in a deal amid reported opposition from shareholders.

There had been talk that Shire's decision this week to sell a valuable part of its business to a French firm in a £1.7bn deal might shake Takeda's resolve.

Jasper Lawler, head of research at London Capital Group, said: "Shire's latest refusal, as well a deal to offload its oncology division, a prize asset that would have been complimentary to Takeda's portfolio, could be the final nail in the coffin of the merger."